The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Maintain a neutral call with an unchanged target price (TP) of RM1.21
Perdana announced that its subsidiary Perdana Nautika Sdn Bhd (PNSB) has been awarded a c.RM 67.0m contract from Petronas Carigali Sdn Bhd (PCSB). The contract is for the supply of a floating accommodation vessel for a period of 3 years, with an optional extension of 2 years commencing 17 September 2016. We are pleased with this award as it reaffirms the Group’s plans to attain a better fleet utilization rate for 2HFY16 which will improve its current rate of 53% as at 2QFY16. We continue to recommend Perdana with a Neutral call with a unchanged TP of RM1.21, based on our DCF approach using a 10.9% WACC. Our estimates have accounted for sufficient contract replenishments albeit considering a lower utilisation rate assumption coupled with a less aggressive expansion plan going forward. Perdana remains suspended in the interim while awaiting the final takeover structure.
PCSB award did not come as a surprise as Dayang, Perdana’s new management has been aggresively bidding for jobs, with the intention to continue boosting the Group’s activities. We are reaffirmed of Dayang’s ability to secure new work for the Group going forward.
The Group’s average utilization for FY16 is expected at c.68%, buoyed by current and potential contracts of both long and short-term durations. We understand there are plans to deploy 3 to 5 vessels to Brunei and Indonesia, while leveraging on its umbrella contracts and closed competitive bidding process to Petronas license holders. We understand that the Group is also exploring possibilities of venturing into regional markets in the ensuing year.
Management plans to leverage on Perdana’s average 6-years fleet for Dayang’s activities in the areas of hook-up & commissioning (HUC) and topside structural maintenance (TSM) mainly in the brownfield segment which have been less adversely affected by the dampened oil price landscape. Of 17 vessels, 7 vessels are currently chartered to Dayang for its operations.
Source: PublicInvest Research, 05 October 2016
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